KISS PRINCIPLE REBORN!
TRADING RULES: A 3-TIER STRATEGY
(1) Only trading one instrument (currently AUD/USD)
(2) Use the “Top -> Down” approach (Day -> 2H -> 30M)
(3) Enter a Trade when all 3 time frames are offering a signal
(4) Stay on the trade until there is another signal to reverse position also with all 3 time frames offering a signal
(5) Trail our stop to the newest higher low (if Long) AFTER a new higher high has been confirmed. Viceversa if Short
(6) Invest only 2.5% of bank at all times, increasing the monetary value of each trade as the bank increases
(7) LESS is MORE!
TIMEFRAMES:
(1) Day Chart indicates overall Trend Direction and what stage of a Swing we are in (Down Swing, Up Swing or Retracement)
(2) 2H-4H Chart is used to find an entry after confirmation of signals at this level
(3) 30M-1H Chart only used to fine tune an entry, to find a “cheaper earlier signal” which conforms with the direction set at (1) and with the signals already showing at (2)
(4) Never enter a trade triggered purely by a 30m-1h chart. These timeframes are only to find cheaper entries
TECHNICALS:
(1) Japanese Candlestick: A must have in all timeframes to confirm a High/Low or a Bear/Bull signal has been formed. No candle confirmation, no trade!
(2) Crown Reversal or Gartley Reversal (the basis for my whole trading strategy!)
(3) Fib retracement in the direction of the prevailing trend
(4) RSI Divergence: Only generates an “intention to trade” and it must be in the DAY Chart. The RSI Divergences in lower timeframes (4H-30M) are only “extra” signals to add to the 3-tier strategy (Day -> 2H - > 30M)
(5) Trend Lines: Only used as an “early indication” for a possible beginning of a Crown/Gartley
The 3-Tier Strategy works from top - down and it implies that the stronger signals are at the top tier (Day Chart) whilst the weakest signals are at bottom tier (30M-1H). By this definition, and as stated above, we never start our technical analysis at a 30M chart and decide to enter, even if we can clearly see a “Gartley”. This has been one of my weakness in the past, trying to enter more and more trades at the risk of “efficiency”.
Finally, I see no need to trade multiple instruments any more. If I can afford to enter say 10 trades with difference currencies then all it means is that I can enter ONE SAFE TRADE in the instrument that I know very well, at 10x the bank of 1 single of those trades!
The AUD/USD has been working fine for me, I resumed my trading at beginning of July 2021 (after a 2-month break) and had about 7 trades including one currently active (4:1, 1:1, 5:1, 1.5:1 and 2 losses in between -2). So I believe that FOCUS and SIMPLICITY is the key for consistent profits in the market.
Let the pips be with us all!
PS Stay tune for my new YouTube channel. It takes a video to be able to walk through most of the technical concepts I use to enter my trades and I thought that a youtube channel could help. However, I got to say, I am not a young bloke that knows how to use all these apps, online tools… even though I come from an IT background!, yet I was never a “tech” but rather was a Manager…hence I do not know the tech stuff as much!! Besides, this was over a decade ago!!